Credit card interest rates stay at 14.89 percent for fifth week's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.89% 14.89%
Low interest 10.24%
10.24% 10.37%
Cash back 14.91%
Balance transfer 12.80%
Business 12.85%
Student 13.14%
Airline 15.52%
Reward  14.89%
Instant approval 23.33%
Bad credit 22.73%
Methodology: The national average credit card APR is comprised of 100 of the most popular credit cards in the country, including cards from dozens of leading U.S. issuers and representing every card category listed above. (Introductory, or teaser, rates are not included in the calculation.)
Updated: Feb. 4, 2015

Interest rates on new credit card offers held steady Wednesday, according to the Weekly Credit Card Rate Report.

None of the cards tracked by advertised new interest rates. As a result, the national average annual percentage rate (APR) remained at 14.89 percent for the fifth consecutive week.

Most issuers haven't changed credit card terms since the beginning of the year. During the first week of January, Pentagon Federal Credit Union slashed the lowest available APR on the PenFed Promise Visa from 9.99 percent to 7.99 percent, prompting the national average to fall to its lowest point in nearly three years. The sporting goods store Cabela's also made a minor rate change on the Cabela's Club Visa, but it was too small to affect the national average.

Average rates are currently at their lowest point since February 2012.

Consumers step up card payments
Credit card holders are paying down their debts at record rates, according to new research released Feb. 3 by the credit rating agency Fitch.

Fitch's Credit Card Monthly Payment Rate Index -- which measures the rate at which consumers pay down their outstanding balances -- rose in January to its highest level in decades. According to Fitch, the index climbed to 28.65 percent last month, which is the highest rate the agency has recorded since it began tracking card payments in 1991.

Consumers also paid down their retail cards more aggressively after padding their balances over the holidays.

Cardholders often step up their card payments at the beginning of the year, says Fitch. However, this year's record high payment rate also reflects a significant shift.

According to research conducted by the American Bankers Association, many people have given up carrying a balance on their cards and are paying them off in full each month in order to avoid paying interest. 

The group's latest Credit Card Market Monitor, released in December, revealed that less than half of all cardholders -- 41.2 percent -- are "revolvers" who carry a revolving balance. The rest are either "transactors" (29 percent) who use cards as a convenience and pay off balances each month, or are "dormants" who don't use them at all. "The shift away from revolvers reflects a changing consumer marketplace," the association's Molly Wilkinson said in a news release. "More and more consumers are using their credit card as a payment tool rather than a form of debt."

Cardholders have also become more disciplined in recent years about paying down their balances before they balloon. Meanwhile, card issuers have remained relatively strict since the recession about who can qualify for a new card. As a result, the majority of today's cardholders tend to be more disciplined about how they handle credit.

Consumer spending falls
According to the Commerce Department, consumer spending had been gradually increasing as the economy slowly improved, but fell significantly in December as consumers pulled back on big-ticket purchases, such as home appliances and cars, after ramping up their spending in November.

The Commerce Department's income and outlays survey released Feb. 2,also reported that consumer spending fell by 0.3 percent in December -- the most it's fallen since 2009. Last year was also the first year since 2008 that the seasonally adjusted report showed consumer spending declined during the month of December. A separate Commerce Department report, released Jan. 14, found that retail spending declined significantly in December as consumers cut back on clothing, electronics, sporting goods, restaurants and other retail purchases.

Consumers also spent less to fill up their cars in December thanks to substantially lower gas prices. But instead of using those savings to increase holiday expenditures, many pocketed the extra money instead.

The Commerce Department reported that the personal savings rate rose to 4.9 percent.   

Despite December's dip in spending, many analysts are optimistic that spending will bounce back significantly in 2015. According to the University of Michigan's Index of Consumer Sentiment survey, people felt better about their finances in January than they had in years.

"Consumer optimism reached the highest level in the past decade in the January 2015 survey," said the University of Michigan's Richard Curtin in announcing the data. American citizens reported feeling better about the U.S. job market and were also more optimistic about their own wage prospects, according to the report.

See related: Fed keeps rates low amid mixed economic signals

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Updated: 03-26-2019